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Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Caterpillar Inc., EBITDA calculation
USD $ in millions
|EBITDA||To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital.||Caterpillar Inc.’s EBITDA declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.|
Enterprise Value to EBITDA Ratio, Current
Caterpillar Inc., current EV/EBITDA calculation, comparison to benchmarks
|Selected Financial Data (USD $ in millions)|
|Enterprise value (EV)|
|Earnings before interest, tax, depreciation and amortization (EBITDA)|
|Illinois Tool Works Inc.|
Based on: 10-K (filing date: 2018-02-15).
If company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Caterpillar Inc., historical EV/EBITDA calculation, comparison to benchmarks
3 EV/EBITDA = EV ÷ EBITDA
= ÷ =
|EV/EBITDA||EV/EBITDA is a valuation indicator for the overall company rather than common stock.||Caterpillar Inc.’s EV/EBITDA ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level.|